On March 21, 2025, domestic equity benchmarks in India closed with substantial gains, marking a notable five-day rally primarily fueled by renewed foreign fund inflows into the cash market. The Nifty index closed just above the 23,350 mark, while the S&P BSE Sensex surged 557.45 points, or 0.73%, reaching a final value of 76,905.51. This boost was largely bolstered by strong demand in sectors such as media, energy, and PSU banks.
This upward trend is part of a broader pattern that has seen both the Sensex and Nifty indices jump significantly over the past five sessions—4.16% and 4.25% respectively. According to market analysts, the recent influx of foreign capital has significantly improved investor confidence amidst otherwise volatile market conditions.
In particular, stocks such as Bajaj Finance (up 2.75%), Larsen & Toubro (up 2.03%), and ICICI Bank (up 1.52%) have made substantial contributions to the indices' gains. The broader market performance was also strong, with the S&P BSE Mid-Cap index increasing by 1.14% and the S&P BSE Small-Cap index jumping 2.05%.
The market breadth was overwhelmingly positive, with 2,823 shares rising compared to 1,213 that fell, and another 126 shares remaining unchanged. Additionally, the NSE's India VIX, a gauge of market volatility, fell by 0.21% to 12.58.
While domestic equities thrived, the yield on India's 10-year benchmark federal paper decreased by 0.12% to 6.739 compared to the previous close. On the foreign exchange front, the Indian rupee edged lower against the US dollar, hovering around 86.985 compared to its prior close of 86.36.
Given this backdrop, certain commodity prices also reflected changes. For example, MCX Gold futures for the April settlement fell by 0.63% to Rs 88,150, and Brent crude for May dropped by 0.44% to $71.68 a barrel.
Looking beyond the Indian market, global influences played a significant role in driving sentiment on March 21, 2025. Futures contracts in the US pointed to a possible negative opening, with the Dow Jones index futures falling by 102 points. This hesitation in the US market comes on the heels of newly announced broad reciprocal tariffs and sector-specific duties slated to take effect on April 2 under the policies of President Donald Trump.
These tariffs have rekindled anxiety on Wall Street, illustrated by the Cboe volatility index (VIX) which had not closed above 40 since spring 2020. As investors navigate these uncertain waters, there’s a palpable concern over both geopolitical tensions and the potential for economic slowdowns. Compounding worries is the rise in initial jobless claims in the US, which ticked up to 223,000 for the week ending March 15, 2025.
Amid these market dynamics, specific companies managed to make headlines on March 21. Telecommunication firm Tejas Networks saw its stock soar by 12.70% following the announcement that it had received Rs 123.45 crore under the Production Linked Incentive Scheme, a governmental effort to bolster domestic manufacturing.
Investors also reacted positively to developments surrounding Manappuram Finance, whose stock surged by 7.7% following reports that Bain Capital intends to invest around Rs 4,385 crore to acquire an 18% stake through an equity and warrants allotment.
Moreover, the Hindustan Construction Company (HCC) saw its shares increase by 11.75% after a joint venture with Tata Projects received a significant contract worth Rs 2,470 crore from Tata Power Company. Conversely, concerns loomed over IndusInd Bank, which reported potential discrepancies in its derivative portfolio, estimating an adverse impact of approximately 2.35% of its net worth as of December 2024, which amounts to around Rs 1,600 crore.
Other notable stock movements included Adani Energy Solutions, which rose by 2% after winning a power transmission project in Gujarat worth Rs 2,800 crore, and Sunita Tools, which hit an upper circuit of 5% after securing a major contract for military supplies valued between Rs 200 crore and Rs 300 crore.
As the market reacts to both domestic policies and international influences, observers note that while the bullish trend is robust, they remain cautious of the potential volatility ahead. The coming weeks will be critical as investors digest the implications of Trump's tariff announcements and monitor evolving shapes in the global economy.
The current environment, marked by both opportunity and risk, calls for investors to remain vigilant, ready to adjust strategies as necessary amid fluctuating market conditions.
